Statement from GNJ Chancellor Sandy Brown.

As you are likely aware, the Boy Scouts of America (the “BSA”) is going through a bankruptcy process (“Bankruptcy”) stemming from a multitude of sexual abuse claims filed against the organization.  The Bankruptcy may have an adverse impact on our local churches that have served as “Chartering Organizations” for Troops or Packs (“Units”) This situation requires immediate action by all affected local churches of our conference.

When a local church sponsors a Boy Scout Unit, the church signs an “Annual Charter Agreement” which suggests that the church is effectively responsible for conducting the Scouting program in its entirety, including the selection and screening of adult volunteers.  As such, a local church that serves as a Charter Organization could be on the hook for a sexual abuse claim. From a pragmatic point of view, up until the time of the filing of the Bankruptcy, there has been no concern about financial exposure for our local churches because a formal arrangement with the BSA has provided for the BSA to be fully responsible for all claims involving our churches through what is generally called indemnification (“Indemnification”).

If a sexual abuse claim arises, a plaintiff likely sues the national BSA organization, the local Council of the BSA, the local Troop, and the Chartering Organization.  You are likely familiar with the idea that bankruptcy can eliminate the debts of a debtor.  Bankruptcy can also extinguish judgements and future claims against the debtor – particularly if the future claim is based on an act that happened before the bankruptcy proceeding.

Accordingly, if the BSA goes through the Bankruptcy and extinguishes liabilities related to sexual abuse claims, a Chartering Organization (including our affected local churches) may be the last entity standing with potential liability.   The concern is that absent a new Indemnification agreement with the BSA, Chartering Organizations may lose rights of presently existing protections because of the Bankruptcy.

The way to try and avoid this negative outcome is for each affected local church to file a Proof of Claim with the Bankruptcy Court.  This will allow for some protections during the course of the Bankruptcy for all Charter Organization which have filed.  All requests fro representation for Proofs of Claim must be indicated by October 30, 2020 so that they can be filed with the Trustee in Bankruptcy, no later than November 16, 2020.

It is essential for each local church to have its board of trustees and/or administrative council, to immediately conduct a very careful review of whether the church has ever been a Charter Organization of any BSA Unit.  For any merged/consolidated churches, the review should include the predecessor church.  The imperative for this historic review is due to the nature of potential sexual abuse claims after the claim deadline. Most of the sexual abuse cases coming up now are related to actions that happened 30+ years ago.  It may not matter if the abuse happened in the 1970s, and it may not matter if you think your church has nothing to do with a BSA Unit other than allowing them to use space for meetings.  Even if you are currently unaware of any potential claims against a BSA Unit if your church had been a Charter Organization going back over 50 years ago, your local church may still be fully responsible for damages arising out of a sexual molestation that far back.

Our national legal leaders from United Methodist Church’s GCFA, are considering coordinating efforts to try and maximize the leverage of all affected United Methodist churches. This might involve the establishment of a central source for filing of all Notices of Claims. It also may include a uniform United Methodist effort to join with all other similarly impacted in order to collectively negotiate with the BSA and the Bankruptcy Trustee during the course of the litigation with the goal of concluding an amicable arrangement going forward.

With the limited information we have to date, each local church should start the above-mentioned review immediately and on its own.  When your church comes to a conclusion about whether your church needs to file a Proof of Claim, have your designated representative complete this tracking form and indicate that your Board of Trustees authorizes the law firm of Bradley Arant Boult Cummings, LLP to file proofs of claim on your behalf.